Udall, Heinrich Join Call to Expand Tax Credit for Working Families During Coronavirus Economic Downturn

WASHINGTON – U.S. Senators Tom Udall (D-N.M.) and Martin Heinrich (D-N.M.) joined 39 senators in a letter to Senate Leaders calling for a temporary expansion of the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) in the next coronavirus relief package. As the economic effects of COVID-19 are expected to continue into the future, the tax credits would put money back in the pockets of working families as they weather the economic downturn. 

At a time of deep economic pain and rising income inequality in New Mexico, the improvements supported by Udall and Heinrich would benefit 841,000 New Mexicans, including 368,000 children and 50,000 Native Americans by expanding the EITC and CTC.

The senators’ letter calls for filling gaps in the EITC and CTC that leave out younger workers, workers not raising children in the home, and the lowest-income families. Under the current tax code, five million American workers—the youngest adult workers on the front lines of the crisis – are ineligible for the credit. Workers not raising children in the home are only eligible for a small credit.

The letter also calls for making the CTC fully available to all children as a refundable credit and increasing the credit amount for children kids under six years of age, to provide additional support to children and families at a time in life that is critical for cognitive development. As the economic effects of coronavirus continue, these changes to the CTC will benefit 26 million children whose families currently cannot receive the full value of the $2,000 credit.

The senators wrote, “COVID-19 has presented our nation with an unprecedented public health challenge. This Congress has taken several bipartisan steps to address it, along with the resulting economic effects we’ve already seen. However, additional measures are critical to confront and reverse ongoing economic paralysis. The EITC and the CTC are proven and effective tools to increase financial stability for workers and their families. Expanding them will provide much needed support to families and boost our economy as our nation recovers from COVID-19.

“Working families are depending on us to meet this extraordinary moment by providing them with the support they need to weather the ongoing economic effects of COVID-19 in the years to come,” the senators concluded. “We must deliver for them.”

Today’s letter builds on the senators’ Working Families Tax Relief Act, which would cut taxes for workers and families by expanding the EITC and CTC. EITC and CTC are two of the most effective tools we have to put money in the pockets of working people and pull children out of poverty. Read more about the bill HERE.

 In addition to Udall and Heinrich, the letter was also signed by Senators Brown (D-Ohio), Durbin (D-Ill.), Wyden (D-Ore.), Baldwin (D-Wisc.), Blumenthal (D-Conn.), Booker (D-NJ.), Cardin (D-Md.), Casey (D-Pa.), Coons (D-Del.), Cortez Masto (D-Nev.), Duckworth (D-ll.), Feinstein (D-Calif.), Gillibrand (D-N.Y.), Harris (D-Calif.), Hassan (D-N.H.), Hirono (D-Hawaii), Kaine (D-Va.), King (D-Maine), Klobuchar (D-Minn.), Leahy (D-Vt.), Markey (D-Mass.), Menendez (D-N.J.), Merkley (D-Ore.), Murphy (D-Conn.), Murray (D-Wash.), Peters (D-Mich.), Reed (D-R.I.), Rosen (D-Nev.), Schatz (D-Hawaii), Shaheen (D-N.H.), Smith (D-Minn.), Stabenow (D-Mich.), Van Hollen (D-Md.), Warner (D-Va.), Warren (D-Mass.), and Whitehouse (D-R.I.).

A copy of the Senators’ letter to Senate Leaders can be found HERE and below.

Dear Leader McConnell and Leader Schumer:

The economic havoc brought about by COVID-19 will have wide-ranging and long-lasting effects, especially on low-wage workers, children, and their families. CBO expects unemployment to rise to 16% and then hold at levels of 10% through the end of 2021. More aggressive policy steps must be taken to get the economy back on an acceptable path. To help address this, we urge you to include a temporary expansion of the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) in the next coronavirus legislative package, to take effect for tax year 2020.

COVID-19 has presented our nation with an unprecedented public health challenge. This Congress has taken several bipartisan steps to address it, along with the resulting economic effects we’ve already seen. However, additional measures are critical to confront and reverse ongoing economic paralysis. The EITC and the CTC are proven and effective tools to increase financial stability for workers and their families. Expanding them will provide much needed support to families and boost our economy as our nation recovers from COVID-19.

The EITC promotes work and provides a financial boost to low-wage workers and their families. However, gaps in EITC mean that millions of people are left out. Low-wage seniors over 64 and the youngest adult workers not raising children in the home are locked out entirely: their EITC benefit is zero. In all, five million workers without children are taxed into or deeper into poverty, receiving only a small EITC benefit. Across our country, we have seen the importance of people who do essential jobs but are paid too little. An expanded EITC would provide additional income to supplement their limited earnings. Among the people who would benefit the most from a robust childless adult EITC are cashiers, health-aides, and truck drivers – workers on the front lines of coronavirus. We must fill the existing gaps and increase the size of the credit generally.

The CTC provides a $2,000 credit to eligible families with children. Unfortunately, it currently leaves behind approximately 26 million children. That’s because their families either qualify for no credit at all, or because they qualify for less than the full $2,000. The time is now to fix these obvious flaws by making the CTC fully available to all children as a refundable credit. Doing so would provide the biggest boost to the poorest families, by simply providing them the same amount that more well-off families already receive. We should also increase the credit amount for kids under 6 years of age, to provide additional support to children and families at a time in life that is critical for cognitive development.  

We must respond to this unprecedented challenge with policies that provide support to the workers and families who will be hit the hardest and affected the longest by this crisis. Doing so also serves as effective economic stimulus, delivering efficient results to American taxpayers. Our Working Families Tax Relief Act, legislation that we are all sponsoring this Congress, provides the model for making these critical improvements to the EITC and CTC. Working families are depending on us to meet this extraordinary moment by providing them with the support they need to weather the ongoing economic effects of COVID-19 in the years to come. We must deliver for them.  

Sincerely,